Daniel Scotto, former head of investment-grade research at BNP Paribas, is seeking "at least" $100 million in damages from his former firm in an NASD Dispute Resolution panel. Scotto claimed in a Wall Street Journal article that after recommending clients sell Enron bonds he was forced to leave BNP Paribas because the firm feared that such a recommendation would damage its investment banking relationship with Enron. BNP co-managed an Enron debt offering in Europe in the spring of last year, according to a claim filed by Scotto's lawyers Liddle & Robinson, a copy of which was obtained by BondWeek.
The claim, dated April 23, states, "Besides destroying his career, BNP also caused Mr. Scotto extreme emotional distress...through its frequent attacks on his character and mistreatment of him, evidenced through publicly humiliating browbeatings by his superiors, a physical assault by BNP's head of high-grade sales, demotion from Head of High Grade Research to simple analyst, and his ultimate termination."
August Wolf, the high-grade sales head accused in the arbitration claim of assaulting Scotto, says, "I'm not a violent person. I would never threaten someone. The last time I was in a fight was in seventh grade."
The claim also states that David Fergione, BNP Paribas high-grade fixed-income head, "created an intolerable working environment for Mr. Scotto, which caused him severe mental distress." Fergione denies the accusations.
Both Fergione and Wolf say they were unaware of the existence of the claim when contacted by BondWeek, as was John Powers, BNP Paribas' general counsel. "If he's filed something, I'm not aware of it," he said. He did not call back with additional comments by press time Friday morning.
Mark Wisniewski, BNP spokesman, says, "BNP Paribas' personnel issues with Mr. Scotto arose from long-standing deficiencies in his performance as a manager and were unrelated to any research recommendations he made. Mr. Scotto's claims are sensationalized, self-serving and wholly without merit. BNP Paribas intends to vigorously defend this action."
Jeffrey Liddle, Scotto's attorney, says, "When we get their response, we'll see what their lawyer is willing to certify to as opposed to what their PR person has to say."